At the beginning of the fiscal year 2001-2002 (FY02), the Centre for Policy Dialogue (CPD),
in its annual Independent Review of Bangladesh’s Development (IRBD), benchmarking the
initial conditions of the economy observed that “the economy is facing possibly the most
severe exigency since the macro-economic crisis of the late 1980s. The twin shocks
emanating from the yawning fiscal deficit and deteriorating balance of payment have exposed
the entrenched vulnerabilities of the Bangladesh economy. Both the successes of the macroeconomy,
achieved during 1990s, viz. stability and growth are in peril” (Bhattacharya,
2003a).
CPD-IRBD 2002 raised the question “whether the emerging negative trends in the macroeconomy
will lead to an extensive loss of employment and income for a protracted period or
whether the present predicament is a short-term phenomenon to be overcome through prudent
policy management and institutional reforms” (ibid).